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Prepare a report for the board of directors of Summer Bodysuit Ltd that analyses the problems faced by the company and that sets
Finance & Accounting
Pages 12 (3012 words)
Report on Summer Bodysuit Ltd. The report as required by the Board of Directors has been prepared with reference to the following requirements based on the working results for the current year and the previous year and the balance sheets for the corresponding period as at the close of the years, and submitted for the consideration of the Board…
2. To study whether bank’s request for a significant reduction in the overdraft facility granted to Summer Bodysuit Limited is reasonable. Structure of the organization The financial problems in a company arise mainly due to weakness in the structure of the organization. Jill Dempsey and Mike Greaves have good experience in the company’s business. The business model, designing and manufacturing of casual and leisure clothes aiming particularly at the younger and higher-income market, is in line with their experience. However, the weakness in the organization structure lies in lack of proper system for financial management. Financial management is a specialized area which needs expertise for efficiency in business operations. Keeble brothers’ involvement in the day to day business activities has been very limited. The business has grown well over the period of time and the order recently received from Arena, a chain of casual and sportswear stores is seen particularly important. The draft accounts from the Auditors confirm the company’s success. But, lack of suitable system for working capital management and planning in capital investment has landed the company in the current financial difficulties. Relationship with the bank and planning for the future The bank wants the company to reduce the overdraft by half over the next six months. ...
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